The Feds just flipped a Turkish gold trader accused of violating US sanctions — and it could spell trouble for Michael Flynn

A Turkish-Iranian gold trader accused of violating US
sanctions on Iran flipped against his codefendant on Tuesday
and will cooperate with federal prosecutors.

The plea deal could spell trouble for former national
security adviser Michael Flynn, who was reportedly offered
$15 million to pursue Turkish government interests in the
US.

The trader, Reza Zarrab, could have information
about Flynn's ties to Turkish President Recep Erdogan that
could be useful to federal investigators examining the
extent to which Flynn was working for the Turkish
government both before and after the election.

A Turkish-Iranian gold trader accused of violating US sanctions
on Iran pleaded guilty on Tuesday, prompting speculation that he
could be cooperating with prosecutors building a case against
Michael Flynn, the former national security adviser whose lobbying work for
Turkish government interests is under federal
investigation.

The trader, Reza Zarrab, was arrested in March 2016 in
Florida. His case was set to go to trial in New
York this week on charges of fraud and money
laundering, but he took a plea deal that will require him to
testify against his codefendant in the same conspiracy, a
defense lawyer said on Tuesday.

Former US attorney Preet Bharara wrote a memo last
May alleging that Zarrab "facilitated millions of
dollars-worth of transactions on behalf of Iran ... through a
global network of companies located in Turkey and the United Arab
Emirates " designed to evade US sanctions.

Bharara also accused Zarrab of wrongdoing that implicated
top Turkish government officials. Zarrab, he alleged,
had "engaged in a massive bribery scheme ... paying
cabinet-level [Turkish] governmental officials and high-level
bank officers tens of millions of Euro and US dollars" to
facilitate his transactions.

Turkish President Recep Tayyip Erdogan fiercely
lobbied high-level Obama administration officials for Zarrab's
release, beginning shortly after Zarrab was arrested in Miami
last March. Erdogan made personal appeals to
both Vice President Joe Biden and President Barack Obama, and he
sent his justice minister at the time to meet with then-Attorney
General Loretta Lynch to argue that the case was "based on
no evidence."

Zarrab was not released, but Erdogan apparently continued
lobbying for his release into January. By the time Obama left
office, the Turkish government had already begun establishing
ties to people close to President Donald Trump, including Flynn
and former New York City Mayor Rudy Giuliani.

Giuliani joined Zarrab's legal team in March, shortly after
Flynn was fired over his conversations with Russia's former
ambassador to the US, Sergei Kislyak.

Federal prosecutors are now pursuing a separate but parallel
investigation into whether Flynn used his cabinet position
to secure Zarrab's release from a New York jail and return to
Turkey a controversial Muslim cleric loathed by Erdogan — in
exchange for as much as $15 million.

Zarrab could have information about Flynn's ties
to Erdogan that could be useful to federal
investigators examining the extent to which Flynn was
working for the Turkish government both before and after the
election.

"You can fill in the gaps that federal investigators are
looking for any relation between Erdogan and Flynn," criminal
defense attorney Danny Cevallos told NBC last week. "So, to
the extent that Zarrab has any connection or knowledge of that,
it is very important that they're flipping him."

Special counsel Robert Mueller has reportedly compiled
enough evidence to bring charges against Flynn and his son,
Michael Flynn Jr., related to his lobbying work throughout
the latter half of 2016 — while he was a top Trump campaign
surrogate — for a businessman with ties to the Turkish
government. Flynn did not register with the US Justice Department
as a foreign agent until March 2017.

Mueller's mandate gives him permission to investigate "any
matters" that arise out of his investigation into Russia's
election interference and whether the Trump campaign colluded
with Moscow.